Global stock markets drop after Fed rate hike

Global stock markets fell Thursday as traders digested a series of interest rate decisions from around the world, notably the U.S. Federal Reserve's latest rate hike. However, the European Central Bank and the Bank of England kept rates unchanged, as anticipated.

FED HIKES: The Federal Reserve raised its benchmark rate for the third time this year as anticipated, increasing its short-term rate by a quarter-point. Policymakers at the U.S. central bank said they plan to continue tightening, indicating three more rate hikes are in store for 2018. The Fed also raised its growth forecast for the U.S. economy, the world's biggest, and predicted that the job market will continue improving.

CHINA RATE HIKE: China's central bank reacted to the Fed's interest rate increase by nudging up its own rate for lending to commercial banks. It left rates for borrowing by companies and the public unchanged. The People's Bank of China said it was responding to market forces by raising the rate charged on its one-year lending facility by a relatively small margin of 0.05 percentage points. Hong Kong's de facto central bank likewise raised its base rate by a quarter-point. Because the Chinese financial hub's currency is pegged to the U.S. dollar, it has no choice but to track U.S. monetary policy.

EUROPE STAYS PAT: While others hiked, the European Central Bank and the Bank of England kept their main rates at zero and 0.5 percent, respectively. Both decisions were expected. The attention now turns to ECB President Mario Draghi and what he says about the economic outlook and whether he provides a new steer on the future path of interest rates.

ANALYST TAKE: "Here we can expect a tight-lipped Mario Draghi, as the head of the bank aims to play for time while the broader economic outlook becomes clearer," said Chris Beauchamp, chief market analyst at IG.

CURRENCIES: The euro was up 0.1 percent at $1.1835 while the dollar rose 0.1 percent to 112.67 yen.

ENERGY: Benchmark U.S. crude fell 33 cents to $56.27 a barrel in electronic trading on the New York Mercantile Exchange while Brent crude, used to price international oils, declined 29 cents to $62.15 per barrel in London.